Optimal taxation in infinitely-lived agent and overlapping generations models: a review


Erosa, Andrés and Gervais, Martin (2001) Optimal taxation in infinitely-lived agent and overlapping generations models: a review Economic Quarterly, 87, (2), pp. 23-44.

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Description/Abstract

A survey of the literature on optimal taxation both in infinitely-lived agent models and life-cycle economies suggests that no consensus emerges regarding the optimal tax rate on capital income. Although the tax rate is invariably zero in the long-run steady state of infinitely-lived agent models, this same zero-tax prescription holds for life-cycle economies only under extremely stringent conditions. Both models suggest that capital income should be taxed at non-zero rates during the transition to long-run equilibrium unless individuals have separable preferences between consumption and leisure.

Item Type: Article
ISSNs: 1069-7225 (print)
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ePrint ID: 47644
Date :
Date Event
2001Published
Date Deposited: 07 Aug 2007
Last Modified: 16 Apr 2017 18:29
Further Information:Google Scholar
URI: http://eprints.soton.ac.uk/id/eprint/47644

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